Chinese fast-fashion company Shein blows past H&M and Zara with US$100 billion value, ranking it among world’s most valuable start-ups
- Shein, an online-only retailer of inexpensive clothes, beauty and lifestyle products, pumps out over 6,000 new items daily
- It is in talks with potential investors including General Atlantic for a funding round that could value the company at about US$100 billion
A Chinese fast-fashion company without a global network of physical stores of its own is seeking a valuation that could be more than the combined worth of high-street staples Hennes & Mauritz (H&M) and Inditex’s Zara.
Shein, an online-only retailer of inexpensive clothes, beauty and lifestyle products that pumps out over 6,000 new items daily, is in talks with potential investors including General Atlantic for a funding round that could value the company at about US$100 billion, Bloomberg News reported Sunday.
Should Shein succeed with the round, it would make the decade-old brand about twice as valuable as Tokyo-based Fast Retailing – the owner of Uniqlo – which last year had more than 2,300 outlets in 25 countries and regions. It would also make Shein the world’s most-valuable start-up after ByteDance and SpaceX, according to data provider CB Insights.
While funding rounds indicate the value of a business broadly, initial public offerings offer a sharper peek into whether a wider base of investors shares the same enthusiasm, especially after the books are thrown open to the public for scrutiny. Most manage to get the valuation they seek, if not better, but some fail. Shein hasn’t unveiled any plans for an IPO.
Early in the pandemic, Shein benefited from changes in consumer behaviour, as shoppers made even more of their purchases on phones or computers. Sales more than tripled in 2020 to $10 billion, making Shein the biggest web-only fashion brand in the world.
The new investment round would reflect the impact of a surge in sales for Shein. At the time of a funding round in August 2020, Shein had a valuation of US$15 billion, according to PitchBook.
How US-China trade war turbocharged shopping app Shein’s growth
Since its launch in 2012, Shein has developed an extensive network of low-cost suppliers in southern China. During the pandemic, it worked with celebrities like Lil Nas X and Katy Perry to boost its profile among Gen Z shoppers outside China.
Despite the astonishing valuation, the Chinese brand faces headwinds, with lawmakers in Washington considering legislation that could hinder Shein sales in the US. The House of Representatives in February approved the America Competes Act, which includes language that would prevent Chinese companies from using a current exemption that allows tariff-free imports of packages worth less than US$800.
The Senate passed a bill without that change, though, and lawmakers have yet to reveal the terms of the final version.
In a sign that Shein expects to enjoy continued growth in the US, the company recently announced plans to open a distribution centre in Indiana that will employ 850 workers. Last month, Shein also agreed to a new programme with Indiana University to offer fellowships to students in the university’s business school.
